Janitor Who Became Multimillionaire Has Financial Lesson for Us All

If you listen to conventional wisdom, there's no way that a gas station attendant and janitor could possibly ever get ahead financially -- let alone become a multimillionaire. But Ronald Read of Vermont did. And it's not that he worked his way up the corporate ladder -- Read actually made his millions by sitting at home. He bought stocks.

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By the time Read died at age 92, friends and neighbors were astonished that he had secretly amassed an $8 million fortune. No one knew since Read didn't live like a millionaire -- he lived in a very modest home, and drove an old car, and according to a friend, would even fix his coat with safety pins!

But behind the scenes, Read was wheeling and dealing -- sort of. He was stock picking. Although he read the Wall Street Journal and Barron's, Read wasn't a stock picking genius. In fact, he had a strategy any one of us could emulate. He bought blue chip stocks and held on to them -- for a very long time.

Read began buying stocks back in 1959  -- and then didn't sell them. While it seems like the stock market is incredibly rocky and combustible, the reality is that it tends to go up over time, as long as you've got a lot of time. And Read did.

He also bought stocks in big companies that were likely to stand the test of time, companies like Pacific Gas & Electric, Procter & Gamble, J.P. Morgan Chase, General Electric and Dow Chemical. That isn't to say that Read must not have seen some tough stock times -- he was in the market during the 2000 crash and must have lost a lot. But if he was smart, he probably picked up some cheap stocks during the downturn.

While Read bought in a lot of different sectors, he stayed away from technology -- which is both good and bad. He would have had less to lose when tech stocks tanked, but imagine if he'd bought Apple in the '90s? He'd be worth way more than the $8 million he died with.

If you stick to the Read philosophy of investing, there's a good chance you too could make a lot of money. Buy stocks in companies that have been around for a long time and are part of the S&P 500 or are considered "blue chip" or "value" stocks. You don't even have to buy a lot of them. I just bought a few shares of Comcast a few weeks ago -- Comcast owns Universal, which distributed 50 Shades of Grey. I was sure the movie would be a hit and wanted to take advantage of that.

There is no doubt that when the market crashes (and many think it's due for another one any day now), it hurts big time. But there is just no way to predict when the market will free fall. I made the mistake of buying an S&P 500 mutual fund right before the crash of 2000. It took me ten years to earn back the $3,000 I spent on it, but hey, at the end of 10 years, I at least had my money back!

More from The Stir: Get Rich With These 15 Home Fixes

If you're young, start to buy mutual funds or stocks now, buy a little at a time, and then hold on to them.

If you're older and don't have years to hold onto stocks, buy a few for your kids. By the time your toddler graduates high school, he or she could be a millionaire if you picked right.

Do you invest in the stock market?


Image via Tax Credits/Flickr

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